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Friday, 5 June 2015

By Whatever Name "Geopolitics" Is Still A Market Risk

While informing select clients about FPM’s idiosyncratic-risk
vested three vehicles, as introduced here, we are
constantly assessing systemic-wide risks. In general we understand that the global
pump-and-prime mechanism of the U.S.-government led policies, are driving the
liquidity, and in some cases the solvency, of capital markets referencing
underlying economic companies. The new-norm of low productivity economies,
especially in the mature developed countries; from public and private entities continuing
to de-leverage from stifling debt levels, while job and profit growth remains mediocre,
is veritably characteristic and wholly acceptable of Great Recessions.

Yet what is incongruous is the gloss and polish airbrushing policies
of the sick and ailing fundamentals of stalled mercantile economies. The last
vestige of the current mode of capitalism, characterised by lethargic corporate
activity and near zero cost of capital, has uncanny parallels with the duration of 1929-started Great Depression.
More recently, Japan long described as a zombie economy during the 1990s is now
not a lone status. FPM understand that the intrinsic corruption of capitalism from
its founding ideals, through blatant cronyism and self-vested pursuits in
office by public administrators / politicians and other public-serving functionaries
is the ultimate ingrained societal malaise. Those supposedly overseeing imbalances
and excesses of a system, such as the regulators as enforcement, and courts as
justice, have been absentia, worse still complicit bedfellows of economic financiers.

The demised state of capitalism will
only be resuscitated by the meaningful alignment of neglected public
interests with long pampered corporate ones. Reform of the socio-economic
balance, which is so out of kilter after 30-years of full throttle free market
capitalism. And longer beyond, of creating wealth inequalities and social
imbalances, with only a pretense at harmonizing forces for economic value. This
would shift focus away from legislators’ subservience to the corporate-vitality
mantra. A political mantra which is deceptively kowtowing to the deep-wallated “big
pharma” or “big oil” etc, at expense of wider social ecological concerns.

Multinational companies cynically organized for a select cabal of owners and executives, driven
only by vested-interests, rather than long-term socially mutual goals, MUST end - “es
muss sein”! We believe the impending market risks forcing stock or bond
corrections greater than 10%-20% is imminent. Further, we believe the new cause
for concern / risks, since the last collapse, where economies were quick-fix
resuscitated with money-printing monetarist policies, is in the form of
GEOPOLITICAL ones. The fundamental underpinning for this is connected with monetarist
globalist government policies which created and sustains the Great Financial
Crash – GFC.

Wealth and income inequality, public spending austerity,
mass populous migration, catalytic climate change and broken socio-economic
infrastructure could should and will lead to escalated geopolitical tensions
internally between regions and countries internationally. This is dangerously true
if plutocratic capitalists and their on-string puppets insist on forcing
through their status-quo preserving secretive regional trade agreements in the
form of USA-Asia’s Trans-Pacific Partnership (TPP), and USA-EU’s TransAtlantic
Trade and Investment Partnership (TTIP). Do NOT be fooled by PR / lobby propaganda,
nothing about these trans-national deals is in our public interest – read more here!
As a case in point of clashing economic and social interests from the recent
past, which averted such geopolitical risk
manifestation, we mention the Scottish Independence Referendum in September
2014.

This narrow democratic
defeat of basically revolutionary proportional ideology reflects the level
of discontent in the socio-economic status quo. That the Scottish people voted
narrowly to maintain its uncomfortable 300-years old union with the seat of
national power in London Westminister is merely a testament to strategic demographic
voting; effected by an increasingly larger elderly population not wishing to
upset the apple cart in their twilight years. Even that Scotchmen’ separatist
or secessionist movement has emboldened itself for the next round, through their
unanimous decision to identify with local political party, the Scottish National
Party in 2015 General Elections – watch this space!

From the past to the present and similar ongoing concern is
the “Greek Tragedy”. A vogue basket-case economy in the midst of the largest
economic bloc in the world is arguably just one geopolitical uncertainty producing a drag on ‘normalised’ capital
markets functioning. Moving from discussing the United Kingdom union in
microsm to deciphering the consequences for the European Union mess is not a
leap too far in terms of geopolitics. As with US-coordinated global policy
solutions to date, the plaster-fixes to deal with real deep seated structural problems
is not going to eradicate them, only alleviate them.

Eventually, Greece and the EU will have to be realistically radical
about its economic health, than its rhetorical appeasement. An public relations appeasement
that preserves stratified social status quo, with rich getting richer exploiting
their poorer brethren, and the poor getting poorer – despite the duped burgeoning
middle-classes; A world wide phenominon. So far the Syriza Party with Tsipiras and
Varoufakis are holding to their voter elected manifesto of 1) end to austerity
2) anti EU stance and 3) resisting privatisation reforms. All these stances are
socially beneficial ambitions and are fundamentally worthy, for the wider public
interest.

Comparably, while the City of London, as an oligarchs’ seat of
capitalist financial power, becomes a mercantile whore to the highest bidder,
selling or monetising its taxpayer-paid real assets into private ownership (see
below pictures of South West London police stations); Greece
ought to be bold and spearhead independent socialist democratic values,
while bucking the corrupt global capitalist takeover. In insidious global
capital markets fashion, even the said taxpayers themselves are indentured through
capitalists’ bedfellows misallocated and wasteful ballooning nationaldebts. Should other nations follow suit for
being in the thrall of current mode of global capitalist? Clearly not – we should
be one for all and all for one in holistic evolution of civilization.

A New Police Station in S.W. London

An Old Police Station (now sold to private developers) in S.W. London

Where the people of Scotland failed in breaking an umbilical
cord maybe Greece can succeed, and thereby become a catalystfor real global change.
Rather than change for change-sake, the monumental trigger would be an inflexion
point for reeling back some of the excesses of the last 30-years or so of
capitalist exploitation. Appropriate it would be then, that the Greeks were
once before heralded as the “Cradle of Western Civilisation”. Greek’s preminent
prominence can once again be that, rather than the “Begging-Bowl in Hand Basket-Case”
of the rashly convened European Union structure.